Several accounts held by Davenport workers found to be possibly illegally tax-free

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The city of Davenport is investigating several personal bank accounts that firefighters or department employees had set up for themselves. Those accounts took advantage of a city ID number that could have been keeping them tax-free.

It's been a busy week for Davenport city leaders and the city's finance director. On Wednesday, October 22, in a statement posted on the city's website, a Davenport spokesperson wrote that 13 private accounts initially set up by fire department personnel at the Family Credit Union, wrongly used the city's taxpayer identification number. That number is used by the IRS and could keep them exempt from income or sales tax.

News eight obtained a letter sent out from the city's finance director to the fire department on Tuesday, October 21. In the letter, the finance director said that any account using the city's ID were doing so without his authorization, violating the city's policy.

The finance department's looking into whether the use of that ID was simply an error or intentional. One of those accounts was called the DFD Clothing Account. A way for firefighters to pool personal funds or use their $700,000 annual allowance for uniforms. It's typical for firefighters to pool resources for things like uniforms and food. However, the city's finance director says doing so tax free is illegal so that account and two others are now closed.

The city has also directed the credit union to remove the city's ID number from the ten remaining accounts by next Friday as the investigation continues.

No word how long this has gone on. We reached out to the finance director for a comment, but he didn't return our calls. The city's fire chief had no comment. It's important to note that no taxpayer funds were ever at risk.



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